Government today de-allocated two coal blocks,including one associated with brother of Tourism Minister Subodh Kant Sahai,even as the Inter-Ministerial Group recommended punitive action against a firm owned by Congress MP Naveen Jindal.

The government also decided to deduct bank guarantees of two companies — Tata Sponge Iron and Bhushan Ltd  for failure to develop blocks allocated to them in Odisha during the prescribed time frame,an official statement said.

A coal block allotted to SKS Ispat and Power Ltd,in which Sudhir Kumar Sahai,is honorary Director was de-allocated by the government on the recommendation of IMG made last Saturday. Sudhir Kumar is the brother of the Tourism Minister,the statement said.

Significantly,Subodh Kant Sahai,senior Congress leader,had reportedly written to Prime Minister Manmohan Singh in 2007 recommending allocation of two coal blocks to SKS Ispat and Power in Chhattisgarh and Jharkhand. The Prime Minister was holding Coal portfolio at that time.

The other coal block approved for de-allocation by the government is New Patrapara in Odisha,given to Bhushan Steel in January 2007. The block has extractable reserves of 316 million tonnes (MT).

The IMG has recommended de-allocation of Macherkunda block given to Bihar Sponge,an official source said.

The IMG also asked for deducting bank guarantee of two others — Jitpur,given to Jindal Steel and Power (JSPL) owned by Naveen Jindal and Chitarpur,allotted to Corporate Ispat,the source said.

Incidentally these three blocks find mention in CAG’s recent report which has estimated that undue benefits to the tune of Rs 1.86 lakh crore might accrue to private firms on account of allocation of 57 mines to them without auction.

The Jitpur mine in Jharkhand was allotted to JSPL in February 2007 and has an extractable reserve of 65.53 million tonnes. The coal from it was meant to be used for an end-use power plant with a capacity of 2X600 MW,to be built about 20 km away from the pit head of the mine.

Macherkunda block in Jharkhand was given to Bihar Sponge in August 2008 and has an extractable reserve of 8.82 MT.

Likewise,Chitarpur block in Jharkhand,which was given to Corporate Ispat & Alloys in September 2005 has 58.6 MT of extractable reserves.

With the de-allocation of two more blocks,the total number of mines that have faced this action has increased to seven. Bank guarantee of seven firms have been deducted.

The IMG has so far recommended de-allocation of eight blocks and deduction of bank guarantee in case of 10 more.

The panel,which is scrutinising 29 out of 58 cases to which notices had been issued,reviewed three cases today and will meet again tomorrow,sources said.

The panel has so far scrutinised the replies furnished by 22 coal block allottees out of 29.

It earlier heard the coal block allottees,who were invited to make presentations from September 6-8,and also obtained updated status paper from Coal Controller/Ministry of Coal.